The number of homes sold in the six months to December fell by almost 5pc to 2,111. Forward sales were even worse, dropping 9.4pc to 1,694.

Redrow shares closed down 6 at 261p after the Bank of England decided against cutting interest rates.

Chief executive Neil Fitzsimmons said: "The condition of the UK housing market became much more challenging and that really reflected the five interest rate rises we had over a year running into the autumn market. We're going to see things slowing.

"[Rising interest rates] were compounded by Northern Rock as we moved into the key selling season of September, October, November, plus the impact of the credit squeeze on mortgage finance."

The average selling price of a Redrow home remained broadly unchanged at £163,000, compared with £162,400 last time. Mr Fitzsimmons expects house prices to remain at a similar level throughout the year.

Margins were hit as the company held back from selling land in a slow market. Redrow was also selective in acquiring new land, resulting in a 6pc decline in the plots held in its land bank to 19,900.

The Bank of England yesterday left rates on hold at 5.5pc. But a cut would have helped to boost confidence among buyers that interest rates will come down this year, said Mr Fitzsimmons.

"The next six to eight weeks are going to be crucial. If interest rates do begin to fall, we might see something better in the housing market later in this calendar year," he added.